Leasing is a popular way to finance IT equipment in both state and private schools in the UK.
Education leasing is a very popular payment solution with budgets being now so tight for schools. With a lease, you pay for the equipment as you use it and do not have to find all the money upfront. Schools find leasing an easier way to budget for large items of capital equipment.
Schools must go through an operating lease (a lease without outright ownership of equipment). An operating lease, the rentals can be very cost effective as they are worked out on a discounted supplier invoice value. Find out more using the link below.
Education leasing for schools enables you to spread the cost over a two or three-year period. Many of the schools we work with will lease the classroom devices then look to recover these rental repayments via the monthly contribution’s parents make.
edde has many years’ experience in leasing for both state funded and private schools. For more information on education leasing call us on 01494 611 465 or enquire online.
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Equipment on an operating lease can be incredibly beneficial to schools and other educational establishments.
avoid up-front payments, and free up cash for use elsewhere.
An operating lease could allow you to deduct payments as operating expenses.
Companies pay employees over time as they work, so why pay all the cost for technology in advance?
Leases are generally not recorded as debts, and won’t affect your balance sheet.
When involved in an operating lease, you don’t outright own the equipment.
Technology moves on quickly, and short-term leasing is the best way to ensure your school keeps up with the latest advances.
Get in touch with our 5* customer service representatives to find out more about how equipment leasing for schools could be advantageous to your school.
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Why is leasing so widely used to finance assets in schools?
Historically, a school may look to run a few computer ICT rooms that have to be upgraded every three years. Paying for this from via a capital budget was a common way to fund the project. With mobile learning, a classroom set for 30 people can cost anything from £7,500.00 upwards. This figure doesn’t consider support, training, maintenance, wi-fi units or charging trolleys etc. Its then not just the cost of maybe four classes in the year and five-year groups, but as new children join a school, then the costs start all over again.
How do state funded school lease?
There are different types of lease funding – finance leases, hire purchase and operating leases. State funded schools are only allowed to use operating leases unless you have the approval of the Secretary of State for Education. In all our twenty-five years plus providing leases for state funded schools and academies, we have never seen this permission granted. Let us look at some of the key questions we get asked about leasing for schools in the state sector.
What assets can a school lease?
Some people say, “If it leaks oil or you can put a plug on it, it can be leased”. So, this will cover turf care equipment, school mini buses, computers and telephone systems. However, most assets can be leased from soft play areas for schools, astro sports fields, catering equipment, wood working kit, software and office furniture. We have financed everything from a phone system to a waste compactor to LED lighting! The list of assets is very long!
How do private schools lease?
Private schools are normally incorporated companies, trusts or charities. The leasing rules that apply to a state funded school do not apply to private schools. However, it may be the private school does have documented rules in its memorandum that stipulates how, when and why leasing is used. It may be such, that some private schools follow the rules and processes of public state funded schools.
Do private schools lease and finance equipment?
Yes, we have leased to many private schools in the past. Often, the school may not even think they are leasing. Photocopier suppliers, companies that install water coolers or waste compactors often only quote on a monthly basis. Their reasons are clear, they make a greater profit by selling a lease contract as it can hide the true capital cost.
What are the benefits to a private school leasing equipment?
What is a finance lease?
A finance lease is a contract between a leasing company and a private school that wants to buy equipment and pay for this equipment over a period. The leasing company will buy the equipment from the supplier and then rent it to the school, normally over a period of one to five years. The private school will pay a regular rental + VAT, normally on a monthly, quarterly or termly basis that covers a proportion of the capital cost plus interest.
What is an operating lease?
An operating lease is a contract between a leasing company / funder and a state school. The school chooses a supplier and equipment which the leasing company then buys. They then rent this equipment to the school or academy over an agreed period, normally not being longer than the useful life of the asset. With an operating lease, the finance company takes a risk in the asset. In practise this means the rentals are worked out on a maximum 89% of the original asset value. The leasing company owns the asset. At the end of the lease period, the school has a number of options: